Vanguard, one of the world's biggest providers, has said continental Europe will be a key growth market in the future, fueled in part by new regulations aiming to remove inducements for financial advisers to push higher-cost funds.

Unlike straight index funds, ETFs are classed as an equity and traded on a stock exchange, making it easier for investors to buy and sell.

Already the UK's largest asset manager with around $1.2 trillion in assets, Legal and General's fund arm currently runs around a third of that in index-funds, although none are ETFs.

The deal for the UK and Ireland-based Canvas platform will help it break into the booming European ETF market via the 14 countries in which it is licensed for distribution. Legal & General did not disclose a value for the deal.

"The ETF market is one of the fastest growing segments in asset management," said Mark Zinkula, CEO of Legal and General Investment Management, in a statement on Wednesday.

"A number of long-term macro trends, including the increasing use of passive vehicles and the drive to digitalisation, will lead to a growing demand for ETF products."

Investors have increasingly put their money into exchange-traded products and funds in recent years, with the global market reaching a record $4.6 trillion at the end of October.

While European ETF assets are just a small slice of that, at around 550 billion euros, Morningstar data to end-2016 showed, the pace of growth is higher. (Editing by Mark Potter)